Supreme Court asks Centre to provide financial relief package to Kerala

New Delhi: The Supreme Court has intervened in Kerala's financial crisis by urging the Central Government to consider a one-time financial rescue package for the state.

As Kerala grapples with fiscal challenges, the court has questioned why loan relaxation cannot be granted under exceptional circumstances. The Centre has been asked to convey its decision by Wednesday. Meanwhile, the Union government informed the court that it will release Rs5,000 crore to the state by April 1.

The court has also asked to the Centre to examine what can be done in the next 10 days to help the state. Senior advocate Kapil Sibal informed the court that Kerala needs more financial assistance to overcome the current crisis.

Earlier, the Centre had announced that it would provide assistance of Rs 13,600 crore to Kerala. Out of this Rs 8,000 crore has already been disbursed. The Attorney General informed the court that the Ministry of Energy has to pay an additional Rs 4,500 crore.

"I do not wish to comment more on the case which is being considered by the Supreme Court. The issue is not just about borrowings. Our prime concern revolves around the fact that the we are not being given the funds we rightly deserve. There is a clear discrimination of states," Kerala Finance Minister KN Balagopal said.

The state's plea seeks the lifting of borrowing restrictions, asserting that central interference compromises federal integrity. Kerala, which spearheaded the legal challenge against the Centre's borrowing limits, claims this has led to retaliatory measures, including the threat of withholding necessary funds unless the case is dropped.

Under the Act, Kerala can borrow Rs 11,731 crore within the borrowing limit. The present petition has nothing to do with this loan amount. The demand in the petition is for immediate permission to take a loan of Rs 24,000 crore. However, this was denied citing the petition.